Covanta discusses biomass, energy facilities in financial results

Covanta Holdings Corp. has released financial results for 2013, reporting operating revenue of $1.63 billion, down from $1.643 billion in 2012. Income from continuing operations was $45 million, compared to $134 million in 2012. Adjusted EBITDA is $464 million, down from $507 million the prior year.

The company highlighted several 2013 achievements in its results, including the acquisition of a 1,050 ton-per-day waste-from-energy facility in Camden, N.J., in August. The facility provides sustainable waste management services to Camden County and surrounding communities while generating approximately 21 megawatts (MW) of renewable energy. Covanta also highlighted the signing of a 20-year waste transport and disposal agreement with New York City.

During a call to discuss the results, Anthony Orlando, president and CEO of Covanta, noted that energy revenue was up slightly compared to 2102. “We had a small increase in output, but prices were slightly down,” he said, specifying that 2013 overall energy revenues increased by $23 million.

In its financial statement, Covanta reported energy revenues of $431 million for 2013, up from $394 million in 2012. Energy revenues for the fourth quarter of last year reached $109 million, up from $97 million during the same period of 2012.

Moving into 2014, Orlando said that total economic energy output from the company’s energy-from-waste facilities is expected to be between 5.5 million and 5.7 million MWh, an increase of approximately 200,000 MWh when compared to last year. He attributed the increase to the Camden acquisition and service fee contracts transitioning to tip fee.

Orlando noted that Covanta has approximately 3.1 million MWh of output contract with an average price of about $65 per MWh. The company also has 1.4 MWh of output that has been hedged with an average price of $44 per MWh, he said, leaving about 1 million MWh exposed to the market.

According to Orlando, Covanta is currently operating four of its seven biomass facilities. He added that the company expects they will achieve higher adjusted EBITDA year-over-year due to higher energy prices this winter and better prices for renewable energy credits.